Coingecko confirms something we all knew: Q3 was the Summer of DeFi, despite the pullback in September, the last month of Q3.
Specifically, CoinGecko noticed a $9.15 billion Q3 surge in capital inflows into the crypto market, as a consequence of the rise to DeFi protocols. This influx of capital centered around the rise of DEXes, with Uniswap holding the highest amount of volume in trading across all of crypto.
Yield Farming Paves the Way for DeFi
With the introduction of yield farming, DeFi boomed in a multitude of ways. The need for insurance under DeFi protocols increased as yield farming gained prominence. Total value locked (for insurance) rose by +375 percent in August according to Nexus Mutual.
Yield farming refers to liquidity allocation in exchange for native network benefits such as token rewards. The most widely recognized instanced of yield farming was popularized by Compound in July.
With the introduction of yield farming, a completely new way of earning in crypto was born.
Food Coins and NFTs: The Past and Future Trends
In addition, food coins became a trend in August. The YAM finance experiment led to an influx of millions of dollars. After YAM, similar coins such as Sushi Swap launched.
During the downturn in September, the market began shifting towards demand for NFTs. NFT-protocols such as Aavegotchi and Shroom.Finance released creative NFT ventures, including collateralized NFTs and uncommon farming.
Coingecko points to market uncertainty and the popularization of NFTs as “what’s next” for crypto.
There seems to be a cooling off of the yield farming craze, while total locked liquidty remains high. Uniswap is likely to continue to grow in terms of trade volume. Aave lending protocol also holds billions of locked liquidity.
NFTs will remain a hot topic, but there is a lack of mainstream stimulus since NFT tokens are tougher to break into than ERC-20 tokens.